the moonstone binds the sun and moon curse. vampires can't walk in the sun and werewolves can only change on a full moon :) if vampires break the curse first, which is what klaus is trying to do, the vampires get to roam free in the sun but most importantly it keeps the werewolves from getting their advantage which would be to turn freely :) if werewolves break it first vice versa

Theory #3: He/She who possesses the moonstone, is in total control. The moonstone could give the holder the ultimate power over werewolves and vampires. Having similar power to the Gilbert device, it would explain why George and Katherine both wanted it so badly.
Reasons why it could work: The moonstone could very well give Katherine the one-up on not just the Lockwoods, but on EVERYBODY!!! And we thought Katherine was tough to beat before!
Reasons why it probably won’t: She would be utterly unstoppable. At least to the supernaturals on the show… but wouldn’t it a dramatic twist if the only person that could stop her was none other than Elena? The moonstone could give advantage to Katherine but it would be too much to say it would make her immune to wooden stakes through the heart as well.